DOJ backs DOTC's move to halt issuing permits to MRTDevco

The Department of Justice (DOJ) has supported the Department of Transportation and Communications' decision to stop issuing permits on development and advertising rights to the Metro Rail Transit Development Corp  (MRTDevco) over the MRT Line 3 until the firm settles its obligations amounting to P2.4 billion.

In a 27-page legal opinion, Acting Justice Secretary Emmanuel Caparas said while the provisions of the 1997 Build, Lease and Transfer Agreement (BLT) between the DOTC and the MRTDevco are silent on the non-payment of development rights payments (DRPs), the Civil Code provides that a party is not required to comply with its reciprocal obligations in case the other party fails to comply with what is expected of it.

“Thus, insofar as disallowing permits on MRTDevco’s supposed advertising rights over the airspace above the stations, DOTC may argue that MRTDevco’s failure to make payments on the exercise of such rights (which has been admitted by MRTDevco) excuses DOTC’s obligation to issue the relevant permits,” Caparas said.

He also said the DOTC was right in disallowing permits for MRTDevco’s supposed rights to lease out commercial spaces in the stations for lack of contractual basis.

Caparas said it "would be irregular to extend MRTDevco permits for lessees on commercial stalls for LRT Phase 1 (EDSA MRT III) as the same has no apparent basis in the BLT Agreement, Tripartite and the Restructuring Agreement."

Caparas issued the legal opinion in response to the letter of DOTC Undersecretary for Legal Affairs Reggie Ramos requesting for his legal opinion on several issues concerning its agreement with MRTDevco on the development of commercial premises in the depot and above the stations of the MRT.

Ramos asked the DOJ’s opinion on MRTDevco's position that the development rights and advertising rights under the BLT agreement and its amendments are "separate and tenable."

He said he wanted to know whether the DOTC can give permits to MRTDevco to exercise its development rights despite MRTDevco’s non-payment of DRP.

The DOTC official also wanted to get Caparas' opinion on whether MRTDevco’s claim over its rights to lease commercial stalls in MRT3 have any legal basis.

In his legal opinion, Caparas said the act of the DOTC and the MRTDevco in entering in the Restructuring Agreement should be given consideration in determining the parties’ intentions when they executed the agreement.

“It would be illogical for MRTDevco, to agree to new terms by which to comply with its obligations to pay DRPs, due to its exercise of development rights it allegedly never had,” he said.

“Thus, we are of the opinion that DOTC and MRTDevco peformed acts which are meant to cement MRTDevco’s obligation to pay the DRP provided in the 1997 BLT Agreement and as amended in the Restructuring Agreement,” he added.

The DOTC had also maintained that there is no basis in the agreements for MRTDevco’s right to lease out commercial spaces within the stations.

The DOJ agreed with the DOTC, stressing that under the 1997 BLT Agreement, it is DOTC, as the lessee of the MRT III that has the right to sub-lease the spaces within the MRT III which includes the stations.

“DOTC’s rights a lessee are separate and distinct from MRTDevco’s right to develop commercial premises in the depot and the air space above the stations,” Caparas said. —KBK, GMA News